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Corporate Law Departments Embracing More Risk and Using Data to Control Costs and Drive Law Department Management
ACC Recognizes 11 Law Departments, 5 Law Firms/Legal Service Providers as Value Champions

Posted: May 28, 2014

WASHINGTON (May 28, 2014) — General counsel at Fortune 500 companies, multi-national corporations and small law departments are assessing risk and using data-driven performance metrics to control costs and align team efforts with corporate strategy, the Association of Corporate Counsel announced at its 2014 ACC Value Champions press briefing today. ACC also highlighted that the leading corporate law departments are reorganizing staffs and improving processes for complex legal matters, including insourcing compliance work and improving predictability in mergers and acquisitions and toxic tort litigation through outside counsel partnerships.

ACC recognized 11 corporate law departments and five law firms and legal service providers for their strategic approaches to increasing client satisfaction and enhancing the value of legal service spending. To do so, they applied original solutions and technology to reduce turnaround times and costs. The accomplishments were honored as part of the ACC Value Challenge, which promotes adoption of management practices that reduce spending and yield better outcomes and higher predictability.

Most of this year's honorees, which include companies from the technology, finance and auto manufacturing industries as well as organizations headquartered in Canada and Brazil, focused on internal process improvement that allowed staffs to handle more work in-house, saving time and money and even reducing litigation. The winning law departments leveraged staff experience, altered client service patterns and allocated team resources to the most complex work. They also made strategic sourcing decisions, turning to less costly offshore and alternative legal service providers for more routine projects.

"The 2014 ACC Value Champions demonstrate that corporate counsel today are active contributors to business strategy and operational goals," said Veta T. Richardson, president and chief executive officer of ACC. "By bringing in-house the legal work that supports core enterprise strategy and using tools more commonly found in tech startups and manufacturers, law departments can assess and embrace risk to achieve better outcomes for their organizations."

This year's Champions also deployed value practices in areas of law that traditionally rely on outside counsel support and large budgets, including compliance, litigation and mergers and acquisitions (M&A) work. One company improved its budget accuracy by 30 percentage points for M&A projects, while another saved nearly $13 million in outside counsel costs by triaging thousands of mortgage litigation cases, keeping almost half in-house and applying business solutions.

Winners pioneered new technology systems that helped them evaluate and calibrate effort to risk, in one instance cutting the time to review low-risk documents by 50 percent. Elsewhere, new collaboration platforms enhanced team flexibility and knowledge sharing. With resulting time savings, lawyers at one company were able to insource 44 percent more work, and devote additional time to employee training, helping reduce instances of employment litigation.

"Many of the Value Champions have used technology in unprecedented ways to bring simplicity to previously burdensome and expensive processes," Richardson said. "We see these often proprietary models as a sign of what 21st century law departments can accomplish when they address their workflows in fresh ways."

ACC recognizes the following 2014 ACC Value Champions, who were selected by a panel of in-house counsel judges, from a group of 83 nominees:

  • ACE Group (Philadelphia) – The insurance company implemented a two-part system that paired a new client service model with a department-created intranet to improve team collaboration and knowledge-sharing as well as to catalog staff skills. The law department reduced expenses by 9 percent at a time of 11 percent company growth and fostered better budget predictability, deployed agile teams and leveraged areas of legal specialization.
  • Caterpillar, Inc., BakerHostetler, Pangea3 and Heyl Royster (Peoria, Illinois, Washington, D.C., New York/Mumbai, India and Peoria, Illinois) – With BakerHostetler, Pangea3 and Heyl Royster, Caterpillar used "lane strategies" to break large buckets of work into smaller groups, then allocate projects to the right type of legal resource. The results were significant cost savings, more accurate budgets, improved results and better employee and client satisfaction. Caterpillar extended its reengineering into the costly litigation space, addressing discovery support and document production.
  • CSA Group (Toronto) – The law department at this engineering professional services firm identified which legal services best supported the corporate strategic plan to hone its resource allocations. CSA Group focused legal department staff on high-value, cross-functional projects and outsourced and streamlined routine work, resulting in cost savings of 90 percent on one project. Additionally, the realignment increased staff engagement and client satisfaction.
  • eBay (San Jose, California) – With the volume of contract work increasing dramatically, eBay's Legal Commercial Team harnessed a new contract management system (CMS), a global mindset and an understanding of risk to achieve time and cost savings. Diverting work to Utah, the team adopted new processes empowered by technology and enabled business units to work on basic legal functions without lawyers' aid, using standard forms. The CMS cut turnaround time in half percent for lower-risk contracts.
  • Embraer S.A. (Sao Paulo, Brazil) – Applying manufacturing efficiencies to legal, the law department set clear metrics through client service performance indicators and empowered the business to complete contracts using a web platform, resulting in 30 percent faster completion time. The company also acts on root cause analysis for all unfavorable litigation decisions as part of its continuous improvement efforts.
  • Huntington Ingalls Industries (Newport News, Virginia) – This shipbuilding company created a strong compliance program that cultivated high engagement with the company's 38,000 employees by mirroring engineering culture. Detailed work plans and linking compliance and compensation contributed to a compliance program reliant on internal resources rather than outside counsel guidance. Savings on external legal spend were $1.4 million for 2013 over 2012.
  • Hyundai Motor Manufacturing Alabama (Montgomery, Alabama) – This start-up legal department was built to handle rapid growth in demand for legal services by harnessing technology to make data-driven decisions. With resulting time and cost savings, lawyers were able to insource 44 percent more work and devote time to employee training, contributing to a reduction in employment litigation.
  • JPMorgan Chase (New York) – When mortgage litigation against Chase's consumer banking division increased ninefold, the department maximized internal resources to triage based on risk and limit spending. By developing the Early Dispute Resolution Program, Chase redirected a large portion of the disputes to the in-house team, identified high-risk cases and worked with their business partners to modify loan terms. The program resolved 1,800 cases and saved $12.6 million in outside legal fees.
  • Microsoft and Perkins Coie (Redmond, Washington and Seattle) – With Perkins Coie, Microsoft brought discipline and predictability to mergers and acquisitions work, traditionally one of the most unruly areas of law. The program, "Deal 360," analyzes the risk and complexity of each M&A transaction, allowing Perkins Coie to prepare custom budget and staffing plans. As a result, Microsoft has increased budget accuracy by 30 percentage points, sometimes trimming the scope of projects to keep costs in line.
  • MSA Safety Incorporated and Reed Smith (Cranberry Township, Pennsylvania and Pittsburgh) – The safety equipment manufacturer sought lower litigation expense, which it achieved with strong outside counsel partnerships to augment a small department. With Reed Smith acting as national coordinating counsel, MSA sets budgets that seek new cost and time savings each year. MSA has reduced expense by nearly 20 percent for some areas.
  • ZS Associates (Evanston, Illinois) – To overcome the challenge of too few resources during a time of company expansion, this legal department stretched itself by pairing specialized in-house counsel with offshore attorneys and used value-based fee arrangements with legal process outsourcers to predict expenses.

About the ACC Value Challenge: The ACC Value Challenge, launched in 2008, has provided resources and training for in-house counsel and law firm lawyers to help affect change within the legal industry. By re-aligning relationships and promoting value-based fee arrangements and other management tactics, such as project management, process improvement, efficient use of technology and knowledge management tools, the market for the delivery of legal services benefits from the same insights and wisdom upon which every other service industry relies to provide world-class value to their clients. For more information, visit http://www.acc.com/valuechallenge.

About ACC: The Association of Corporate Counsel (ACC) is a global bar association that promotes the common professional and business interests of in-house counsel who work for corporations, associations and other private-sector organizations through information, education, networking opportunities and advocacy initiatives. With more than 33,000 members in 85 countries employed by over 10,000 organizations, ACC connects its members to the people and resources necessary for both personal and professional growth. By in-house counsel, for in-house counsel.® For more information, visit www.acc.com and follow ACC on Twitter: @ACCinhouse.

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